Click on the renamer icon - its over to the left of the box that pops up - you can the tell it where you are currently keeping your roms (unknown files folder) and where you would like offline list to keep them when its sorted them out (verified roms).

Make sure you put the modules that patch and trim the roms into the modules directory (it'll be in the offline list directory somewhere)

evil_king: no - I only have a 128Mbit cart so I can still only use these size roms. But I can carry loads of roms around with me on smartmedia and flash them to the cart whenever I want! But since the wallet has no save game support I have to keep my save games on an XG-flash memory stick.